Ping:Lawyers-advice appreciated

[jamesUMD]

I'm sorry to bother anyone. I have a question regarding a situation that my wife is going through and I was hoping that any lawyers out there might be able to give me their opinion.

My wife was the financial manager at a small environmental non-profit for 4 years and just recently left for a new job. She was not a manager or officer in the legal sense, just a manager as in she was only person outside of the directors that handled the money.

About 8 months before she left she confided in me that she was overwhelmed and a lot of things were falling through the cracks. Some of the finances were out of wack, and she was having trouble keeping up with everything. We decided that she needed to sit down with her supervisor who happened to be the directer of the non-profit and the 2nd in command who basically signed off on the finances but really had no finance background, and tell them what has happened, where they stood financially, and to be honest that she did not realize things had gotten so far out of control and she was really scared as to how to approach them about the problem.

My wife is not a certified accountant and at some point her job duties outgrew her job experience. That along with the increased workload made for a bad situation. When she started in her position she the company was much smaller in size (revenue, employees, and workload) and her duties were much less complicated.

She sat down with them and explained what was screwed up, how it got that way, and her best guess as to how to fix it. She was really worried about getting fired. She was basically in the spot where she was responsible for coming up with budgets, doing payroll, applying money to projects and so forth. They seemed very understanding though she was not sure if they grasped the scope of everything that was messed up.

Anyways, she was putting in horrendous hours trying to make amends for what had gone wrong and slowly try to fix things. She was miserable, as she had more supervision in what she was doing, but the people doing the supervising still did not have much idea about finances so it was making it difficult.

She finds out that they are looking for someone for her position, but she doesn't know where that leaves her so she started looking for another job (at my behest). She finds a job that will pay $10,000 more and pay for school. She did not want to leave but she also felt that she had burned some bridges so she took the position.

She leaves and all is fine. She heard today from another girl she is friends with, that quit her company before she left, that the director of her old company is looking into legal action against her because she missed making some of the payments into employee's retirement accounts (the money never left the company account) and now they will have to make them retroactively. Her boss also thinks that she possibly was stealing from the company which is crap. They went through several changes to their payroll system, added 2 additional retirement plan providers, and numerous other changes that she had a hard time keeping up with, so even when the numbers were right in the accounts, she may not have been able to keep up with the book keeping apsect.

She is afraid that they will bring a lawsuit against us. I work with 401K plans but the depth of my knowledge of liability when it comes to responsibility is severely limited. She had to have things signed off by the people above her, and they basically relied on her judgement, though she was not a manager or officer with the non-profit, and she felt that it was beyond her experience. I can see her as being guilty of doing a poor job handling the finances, but could she really be guilty of a crime if she has not stolen anything? Any insight would be grateful and I am sorry to be long winded. I can provide extra details as neccesary. Thanks!

[jamesUMD]

I really could use any help!

[Suicane75]

Give it time, board is slow at nights. I'm sure you'll be asissted.

[DaddyTorgo]

wow Sui...that's a surprisingly non-sarcastic response from you. New medication?

edit: i don't wanna threadjack poor James' thread. sorry man.

[ISiddiqui]

So she couldn't make any financial moves without it being signed off on by the bigwigs? Was she listed as Plan Administrator?

If the money was in the corporate account and she didn't put them in timely, there is missing interest payments that the company will have to remit. The question is was there anyone else that could put the money into the account?

[Loren]

im not a lawyer but having been in a position that sounds a lot like your wife's before, im betting that IF her ex boss ever said anything about legal action he was just spewing off at the mouth so he didnt have to admit that they screwed up, as long as she never actually stole any money what can she be charged with? If she was hired as a "financial manager" did they not explain what her responsibilities would be? Either way, if they gave her more duties then she'd figured and they never bothered to make sure she knew what she was doing its on them..a lot of time company's will hire someone and be like, hey lets see what else she can do..and they start adding more and more jobs that YES an actual "accountant" should be doing..but what do they care, if you show you can do a good part of it and they can keep paying you for the original job title, oh well....I learned everything i know about businesses financing this way, but ive also quit a LOT of jobs when they started doing that shit to me, i dont need the money THAT badly anymore so when they dont put that extra money for the extra duties there, im gone...i DO think your wife should have quit or asked for way more help when it came to the payroll, you dont want to screw with some innocent employees life..BUT all in all as long as she didnt steal any money, it should all fall back on whoever was HER supervisor.. it's a supervisor/director's responsibility to ensure that the people under them are capable of doing their job and are doing it right, if no one was looking over her work, and someone above her SHOULD have been looking over monthly budgets well enough to notice that somethin was off when certain monies weren't being paid out in relation to all the employee deductibles, THEY were the one's fukking off on their jobs..and though it's a pain in the ass, they CAN just "fix" it now..so im thinking her boss is just a little bitter cuz they didnt do their jobs well..did she ever notice any actual money missing in the accounts that they might try to pin on her though? if not then tell her not to stress out..but this is all JMO

[digamma]

Originally Posted by jamesUMD

I'm sorry to bother anyone. I have a question regarding a situation that my wife is going through and I was hoping that any lawyers out there might be able to give me their opinion.

My wife was the financial manager at a small environmental non-profit for 4 years and just recently left for a new job. She was not a manager or officer in the legal sense, just a manager as in she was only person outside of the directors that handled the money.

About 8 months before she left she confided in me that she was overwhelmed and a lot of things were falling through the cracks. Some of the finances were out of wack, and she was having trouble keeping up with everything. We decided that she needed to sit down with her supervisor who happened to be the directer of the non-profit and the 2nd in command who basically signed off on the finances but really had no finance background, and tell them what has happened, where they stood financially, and to be honest that she did not realize things had gotten so far out of control and she was really scared as to how to approach them about the problem.

My wife is not a certified accountant and at some point her job duties outgrew her job experience. That along with the increased workload made for a bad situation. When she started in her position she the company was much smaller in size (revenue, employees, and workload) and her duties were much less complicated.

She sat down with them and explained what was screwed up, how it got that way, and her best guess as to how to fix it. She was really worried about getting fired. She was basically in the spot where she was responsible for coming up with budgets, doing payroll, applying money to projects and so forth. They seemed very understanding though she was not sure if they grasped the scope of everything that was messed up.

Anyways, she was putting in horrendous hours trying to make amends for what had gone wrong and slowly try to fix things. She was miserable, as she had more supervision in what she was doing, but the people doing the supervising still did not have much idea about finances so it was making it difficult.

She finds out that they are looking for someone for her position, but she doesn't know where that leaves her so she started looking for another job (at my behest). She finds a job that will pay $10,000 more and pay for school. She did not want to leave but she also felt that she had burned some bridges so she took the position.

She leaves and all is fine. She heard today from another girl she is friends with, that quit her company before she left, that the director of her old company is looking into legal action against her because she missed making some of the payments into employee's retirement accounts (the money never left the company account) and now they will have to make them retroactively. Her boss also thinks that she possibly was stealing from the company which is crap. They went through several changes to their payroll system, added 2 additional retirement plan providers, and numerous other changes that she had a hard time keeping up with, so even when the numbers were right in the accounts, she may not have been able to keep up with the book keeping apsect.

She is afraid that they will bring a lawsuit against us. I work with 401K plans but the depth of my knowledge of liability when it comes to responsibility is severely limited. She had to have things signed off by the people above her, and they basically relied on her judgement, though she was not a manager or officer with the non-profit, and she felt that it was beyond her experience. I can see her as being guilty of doing a poor job handling the finances, but could she really be guilty of a crime if she has not stolen anything? Any insight would be grateful and I am sorry to be long winded. I can provide extra details as neccesary. Thanks!

Standard disclaimer that this does not constitute legal advice, but simply general statements on legal principles.

I don't think you should get worked up over this until you have more concrete evidence that the company is considering legal action.

It is rare for a company to take legal action against an employee or former employee, especially when the acts of the employee may be negilgent at best (or worst). If something does come of this, one of the first questions you (or your wife) should ask is to see the company's articles and by-laws and get a good handle on the indemnification policies and procedures the company has in place. Depending on her role in the company and the procedural framework of any "case," she may be entitled to representation paid for by the company.

I'm assuming your wife was an at-will employee. If she had an employment agreement, there may be provisions for dispute resolution and survival of claims following termination.

It also might be worth your wife's time to make a timeline, as best as possible, with dates of when she started work, what duties she had, when she became aware of the inadequacies, when she complained, when she quit her job, etc.

I believe Hawglaw is an employment attorney (maybe one of the Honolulu Blues as well). They may have more specific knowledge.

[jamesUMD]

Originally Posted by digamma

Depending on her role in the company and the procedural framework of any "case," she may be entitled to representation paid for by the company.

I'm assuming your wife was an at-will employee. If she had an employment agreement, there may be provisions for dispute resolution and survival of claims following termination.

It also might be worth your wife's time to make a timeline, as best as possible, with dates of when she started work, what duties she had, when she became aware of the inadequacies, when she complained, when she quit her job, etc.

I'm going to pass this along. Thanks digamma. Employee payroll was always done, but the issue was that all the hours had to be accounted to different projects, which they had a system for. Then the director wanted to start using a new payroll program, and it was not very compatible with the system they had in place, but my wife had no say in the matter, so she just had to do the best she could. Eventually she convinced them to bring on a 3rd party vendor (ADP I think) to do payroll (because she didn't want to get so overwhelmed that anyone's pay got messed up/missed).

The director was also the one that decided to introduce 2 additional retirement plan providers during this tough stretch. There are only 20 employees in the organization so having 3 different plan providers seemed excessive to me since I work with 401ks. She was having trouble keeping up with making payments into the 2 new accounts for employee's payroll deductions. At my work we receive late contributions frequently (we just received one from February yesterday). Generally they are posted as of the date we were originally supposed to get the contribution and yes, then the client would make up for any gains/losses that were accountable.

All the advice is extremely helpful. Thanks and keep it coming .

[John Galt]

My only suggestion is to get a lawyer and don't post on a message board about this. Admissions can only hurt you and her down the road. Sorry, but this is not the sort of case that helps to be discussed publicly.

[Ksyrup]

Agreed. You guys should post just enough to get the general idea out there, but you don't want to be specifically describing what actions you took, and definitely not what you might have done wrong.

[Blackadar]

Generally, incompetence isn't a crime. I wouldn't be concerned about it until you get something legal from them.

[Ksyrup]

This isn't about criminal culpability, though. They could still sue her for negligence.

[Blackadar]

Originally Posted by Ksyrup

This isn't about criminal culpability, though. They could still sue her for negligence.

I know. I'm tired this morning.

It's rather difficult for an employer to successfully sue a former employee for negligence. Given that they were signing off on the financials and made the hire in the first place, it would be virtually impossible if the facts above are accurate.

[Ksyrup]

Yes, but often this isn't really about winning. It's about suing people who don't have the finances to defend themselves through a full-blown trial and hoping to get them to settle for at least a portion of what the company owes.

[digamma]

Originally Posted by John Galt

My only suggestion is to get a lawyer and don't post on a message board about this. Admissions can only hurt you and her down the road. Sorry, but this is not the sort of case that helps to be discussed publicly.

Agreed.

[Blackadar]

Originally Posted by Ksyrup

Yes, but often this isn't really about winning. It's about suing people who don't have the finances to defend themselves through a full-blown trial and hoping to get them to settle for at least a portion of what the company owes.

That only works if the company thinks they can collect something worth more than their time/attorney expenses. You can't get blood out of a stone. And if the defendant has enough money to be worth pursuing, they usually have enough money to hire a competent attorney. And the company also has to worry about the possibility of a counter-claim. This is nothing more than 3-party innuendo and rumor at this point and should be dismissed without giving it a second thought. The boss is just grumbling and making her a scapegoat for issues. It happens in many companies.

I've been through this many times - up to catching employees outright stealing - and every time we've let them walk (though the ones caught stealing were told not to bother trying to collect unemployment or we'd call the police). It's almost always not worth it from a business disruption, employee morale and countersuit liability standpoint.

[ISiddiqui]

I also agree with getting a lawyer. But the questions I asked before are important. It seems like there were levels above her in putting the money into the plan, but if she was considered the Plan Administrator (was responsible for taking the money out and putting it into the plan), the company probably has a better case. Plan Administrators are subject to the reasonable care exercised by a cautious Plan Administrator (not a reasonable lay person) and are assumed to be competent by their position.

[John Galt]

Originally Posted by Blackadar

That only works if the company thinks they can collect something worth more than their time/attorney expenses. You can't get blood out of a stone. And if the defendant has enough money to be worth pursuing, they usually have enough money to hire a competent attorney. And the company also has to worry about the possibility of a counter-claim. This is nothing more than 3-party innuendo and rumor at this point and should be dismissed without giving it a second thought. The boss is just grumbling and making her a scapegoat for issues. It happens in many companies.

I've been through this many times - up to catching employees outright stealing - and every time we've let them walk (though the ones caught stealing were told not to bother trying to collect unemployment or we'd call the police). It's almost always not worth it from a business disruption, employee morale and countersuit liability standpoint.

In a case like this, there can be many other motives to bring a suit if the fund really is screwed up. It may or may not end up being brought, but with duties of care, things get more complicated than a simple theft/embezzlement case.